Bloomberg News

Hungary November Sentiment Improves for First Time Since April

November 29, 2011

Nov. 28 (Bloomberg) -- Hungary’s economic sentiment improved in November for the first time since April as businesses and consumers became more optimistic.

The main index rose to minus 23.2 from minus 24 the previous month, the Budapest-based GKI research institute said today in an e-mailed statement. The business confidence index climbed to minus 14 from minus 14.9 in October, while the consumer confidence index increased to minus 49.5 from minus 49.8.

“November brought about a halt in the deterioration of economic sentiment, which had been going on for a good half year,” GKI said. Business sentiment was boosted by the service industry while sentiment in industry, which helped pull Hungary out of recession, deteriorated “minimally,” according to GKI.

The economy expanded 1.4 percent in the third quarter after stalling in the previous three months. Gross domestic product may expand 0.6 percent in 2012, undershooting the government’s 1.5 percent forecast, central bank President Andras Simor said Oct. 18.

The government abandoned its policy of shunning the International Monetary Fund earlier this month and said it was seeking a deal with the Washington-based lender to help boost growth. Moody’s Investors Service cut Hungary’s credit rating to junk on Nov. 24 and Standard & Poor’s said it may also lower Hungary’s rating to non-investment grade by February.

The government is raising taxes and cutting spending to meet its budget-deficit goal of 2.5 percent of GDP product next year.

Households’ fear of unemployment eased “a little” in November and a willingness to employ new staff rose among industrial and services companies increased, GKI said.

GKI’s indexes are calculated based on a balance of positive and negative answers to questions about the outlook for the economy.

--Editors: Balazs Penz, Alan Crosby

To contact the reporter on this story: Edith Balazs in Budapest at ebalazs1@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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